Disposal of Subordinated Loans of 77 Bank

Press Release

Date: June 22, 2015

  1. The 77 Bank, Ltd. (“77 Bank”) has recently made a request to the Resolution and Collection Corporation (“RCC”) for disposing (payment before the deadline) its subordinated loans lent by RCC in accordance with the Act on Special Measures for Strengthening Financial Functions (“the Financial Functions Strengthening Act”). The Deposit Insurance Corporation of Japan (“DICJ”) has been requested to approve the disposal from the RCC.
  2. The DICJ considered the disposal based on its “Immediate Guideline for Disposal of Preferred Shares and other Capital-Raising Instruments Acquired through Capital Injection with Public Funds” announced in October 2005, and did not find any special problems in view of the following:
    • The soundness of management of the financial institution;
    • Avoiding public costs; and
    • Financial system stability.
    Therefore the DICJ made an application for disposal of subordinated loans to the Commissioner of the Financial Service Agency and the Minister of Finance, and the application was approved today.
  3. This disposal of subordinated loans, which is outlined as below, will result in full repayment of public funds injected into 77 Bank.
Outline of the related subordinated loans
Name Subordinated Loans with Deadline
Laws and regulations that becomes the basis The Act on Special Measures for Strengthening Financial Functions
Loan Date December 28, 2011
Loan amount ¥20 billion
Date of repayment March 31, 2022
Approved rate Funding cost as an annualized rate of preferred dividend announced by the DICJ in each fiscal year.  However, 12-month Japanese Yen TIBOR or 8%, whichever lower will be used as a cap rate.
Disposal amount ¥20 billion
Expected date of disposal June 29, 2015

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